Monday, June 18, 2012

Swiss stocks - Factors to watch on June 18 - Reuters

ZURICH, June 18 (Reuters) - Swiss stocks were expected to soar on Monday, with markets across Europe expected to open sharply higher after Greek election results showed that parties committed to staying in the euro zone won a slim parliamentary majority.

Futures for the blue-chip SMI were up 67 points at 5,956 points at 0608 GMT.

The following are some of the main factors expected to affect Swiss stocks on Monday:

CREDIT SUISSE

Credit Suisse has no plans to issue new shares after the Swiss central bank called on it to improve its capital base this year, but should be able to do so by retaining earnings, Chief Executive Brady Dougan was quoted as saying on Sunday.

For more, see

COMPANY STATEMENTS

* Myriad announced that the recommended increased share offer for the entire issued and to be issued ordinary share capital of Synchronica had been declared unconditional in all respects.

* Parties supporting a bailout saving Greece from bankruptcy won a slim parliamentary majority on Sunday, beating radical leftists who rejected austerity and bringing relief to the euro zone which was braced for fresh financial turmoil.

Stocks and the euro rose to the highest levels in a month, and commodities climbed as gains by pro-bailout parties in Greek elections eased concern the nation would exit the euro. Indian stocks erased advances after the central bank unexpectedly left rates unchanged.

The MSCI All-Country World Index advanced 0.7 percent to the highest since May 15 at 8:04 a.m. in London. The Stoxx Europe 600 Index climbed 1.1 percent and Standard & Poor’s 500 Index futures added 0.4 percent. The euro strengthened 0.5 percent to the highest since May 22, and the dollar and yen fell against most major counterparts. The S&P GSCI Index of 24 commodities rose 0.8 percent while bond risk in Asia dropped to the lowest since May 8.

The New Democracy and Pasok parties won 162 seats, enough to form a majority in the 300-member parliament, according to Interior Ministry projections, easing concern that Greece would reject austerity measures needed to qualify for international aid. India’s Sensex index erased earlier gains after central bank governor Duvvuri Subbarao left the benchmark repurchase rate at 8 percent, citing inflation concerns.

“The market will breathe a sigh of relief,” Todd Lowenstein, who helps oversee about $17 billion for Highmark Capital Management Inc. in Los Angeles, said in a phone interview. “The results of the Greek election took a negative off the table versus this being a big positive. At the end of the day, there are still structural issues and imbalances that need to be corrected and dealt with.”

G-20 Meets

The vote forced Greeks, in a fifth year of recession, to choose open-ended austerity to stay in the euro or reject the terms of a bailout and risk the turmoil of exiting the 17-nation currency. European governments indicated a willingness to relent on Greece’s austerity measures.

The new government must emerge “swiftly” from the contest, euro finance ministers said in a statement on June 17. Greece’s international monitors will “return to Athens as soon as a new government is in place to exchange views with the new government on the way forward,” according to the e-mailed statement.

Discussions among officials from the Group of 20 nations over ways to stimulate the global economy are similar to those that took place at the summit in Cannes, France last year, where countries made varying commitments to support the global economy, with some European countries pledging to reduce deficits while emerging markets and those with healthier finances would boost spending if needed, a Canadian official said.

Trillions Lost

G-20 leaders will issue a statement at the end of their two-day summit in Los Cabos, Mexico, on June 19. They will boost the $430 billion firewall the International Monetary Fund announced in April, host President Felipe Calderon said June 16.

More than $5 trillion has been erased from stock prices around the world since March, with benchmark indexes in Brazil, Russia and Italy falling into bear markets, or losses of 20 percent or more from recent peaks. Shares of BHP Billiton Plc, the world’s biggest mining company, gained as metals including copper, lead and nickel rose.

The MSCI Asia-Pacific Index has lost 11 percent from this year’s highest level in February. About four shares rose for each that fell in the gauge. Hong Kong Exchanges & Clearing Ltd., the world’s second-largest bourse operator, slipped 4.1 percent after agreeing to pay 1.39 billion pounds ($2.18 billion) for the London Metal Exchange.

“This is a shocker,” D.K. Aggarwal, who manages about $100 million of Indian assets as chairman of New Delhi-based SMC Wealth Management Ltd. “A rate cut was a must because the growth was slowing.”

The MSCI All-Country World Index (MXWD) rose 1.7 last week, gaining for a second straight week, amid speculation central banks will increase measures to stimulate growth in economies threatened by Europe’s debt crisis.

“There’s a short-term sigh of relief,” said Belinda Allen, Colonial First State Global Asset Management in Sydney, which oversees about $145 billion. “The medium term is still challenging. And we’ve got the Federal Reserve meeting this week. Markets will turn their attention to what the Fed is going to say. They’ve certainly been suggesting that they can do more. Whether or not they’re willing to do it now is the big question.”

Commodities Increase

Reports on U.S. industrial production, jobless claims and consumer confidence last week trailed projections, fueling expectations that the central bank will take more steps to boost the economy when it meets for two days from June 19.

The S&P GSCI index rose for a third day as oil in New York advanced as much as 1.9 percent to $85.60 a barrel, the highest intraday price since June 11, while copper in London gained as much as 1.4 percent to the highest in more than two weeks. Gold fell 0.4 percent to $1,620.22 an ounce as demand for haven assets diminished.

The cost of insuring Asian corporate and sovereign bonds from default decreased with the Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan losing 6.5 basis points to 173.5 basis points as of 8:53 a.m. in Hong Kong, Royal Bank of Scotland Group Plc prices show. The index is headed for its lowest close since May 8, according to CMA, which is owned by CME Group Inc. and compiles prices quoted by dealers in the privately negotiated market.

The euro extended last week’s 1 percent jump against the dollar as Greek election winner Antonis Samaras begins his second bid to form a coalition government after a May 6 election left politicians deadlocked. The crisis escalated on June 9 when Spain asked for a bailout of as much as 100 billion-euro ($127 billion) to prop up its banks.

The Australian dollar touched a one-month high as Australia’s Treasurer said mineral exploration spending in the nation rose to a record in March. New Zealand’s dollar reached the strongest in six weeks as data showed the country’s services industries grew last month.

Asian Stocks, Euro, Oil Advance on Greek Pro-Bailout Parties Win

Tomohiro Ohsumi/Bloomberg

The euro extended last week’s 1 percent jump against the dollar, and U.S. stocks were poised to add to a weekly rally, the New Democracy and Pasok parties took 162 seats in the 300-member parliament, according to the official projection by the Interior Ministry in Athens based on 95 percent of the votes.

The euro extended last week’s 1 percent jump against the dollar, and U.S. stocks were poised to add to a weekly rally, the New Democracy and Pasok parties took 162 seats in the 300-member parliament, according to the official projection by the Interior Ministry in Athens based on 95 percent of the votes. Photographer: Tomohiro Ohsumi/Bloomberg

June 18 (Bloomberg) -- Viktor Shvets, the head of thematic equity research at Credit Suisse Group AG in Hong Kong, talks about the outlook for the European sovereign debt crisis, its implications for global markets and investment strategy. He speaks with Rishaad Salamat on Bloomberg Television's "On the Move Asia." (Source: Bloomberg)

June 17 (Bloomberg) -- Greece avoided political and financial chaos as voters gave a narrow victory to pro-bailout parties in Sunday's election. But it won't be easy for first-place finisher New Democracy to form a coalition government. Bloomberg TV Economics Editor Michael McKee reports from Athens. (Source: Bloomberg)

The local market was one of the first to open after Greece’s pro-bailout conservative New Democracy party, that backs keeping the country in the eurozone and maintaining austerity measures, came in first in the nation’s weekend polls.

The benchmark S&P/ASX200 index jumped 79.6 points, or 2 per cent, higher at 4136.9, while the broader All Ordinaries index rose 76.9 points, or 1.9 per cent, at 4183.9.

Among the sectors, materials and energy both jumped 2.5 per cent, while financials rose 2.1 per cent. Utilities were the only sector to post a fall, slipping 0.2 per cent.

The gain for the ASX200 was the biggest since January 4, with the overall market’s value swelling by about $24 billion.

City Index chief market analyst Peter Esho said the copper price rose after the election result in Greece, leading to big gains among the nation’s miners.

‘‘The sharemarket gains have been driven by a bounce in the materials stocks,’’ Mr Esho said. ‘‘Copper’s a good lead indicator and that’s providing a boost for a lot of the materials stocks that have been pretty beaten up.’’

Greece’s two main pro-bailout parties won enough votes to form a government in Sunday’s knife-edge elections.

The result eases fears that Greece could dump the euro currency and reject austerity measures tied to an international bailout package designed to address its sovereign debt woes.

Top miners powered the market higher, with BHP Billiton up 2.7 per cent to $32.70 and Rio Tinto up 4.7 per cent to $57.08, helped by a surge in copper prices to their highest in nearly three weeks on the back of the Greek vote.

Analysts saw the Greek election as just one of several hurdles, including the US Federal Reserve meeting and G20 summit this week and a European Union leaders summit later this month, that need to be cleared before a stronger push upwards.

The market is counting on additional stimulus from the US Fed and moves by the European Union to ease the austerity measures demanded of Greece, to boost growth and make the debt bailout more palatable to the country.

The big four banks all rose between 1.3 and 3.1 per cent, led by National Australia Bank. ANZ was 57 cents higher at $21.85, National Australia Bank 75 cents higher at $22.87, Westpac was up 46 cents at $20.80 and Commonwealth Bank up 62 cents to $51.51.

Fairfax Media jumped 7.4 per cent to 65 cents, its highest level in two weeks, after announcing an overhaul of its top newspapers and 1900 job cuts over three years to cut costs. It also shored up its balance sheet by selling down its stake in online auction site Trade Me.

The move comes at the same time that mining billionaire Gina Rinehart has been increasing her stake in the publisher and is looking to win at least one seat on the board of the company.

Little Creatures owner Little World Beverages soared 36 per cent after its main shareholder, Japan's Kirin Holdings, agreed to buy out the boutique brewer for $256 million, or $5.30 a share.

Lynas Corp rose 6.3 per cent after the Malaysian government dismissed an appeal against a temporary operating licence for the company's rare earths processing plant in the country.

Electronics retailer JB-HI Fi edged up 0.5 per cent. A substantial shareholder in JB Hi-Fi, the most heavily shorted stock in the top 200, has sold down its stake to two buyers, in trades handled by UBS, two dealers said. A UBS dealer declined to comment on the trade.